What Is Identity Theft?
Identity theft occurs when someone uses your personally identifying information, like your name, Social Security number or credit card number, without your permission, to commit fraud or other crimes.
The Federal Trade Commission (FTC) estimates that as many as 10 million Americans have their identities stolen each year. In fact, you or someone you know may have experienced some form of identity theft.
Maybe thieves rummaged through your trash, found a bank statement, and misused your checking account? Maybe they rented an apartment using your name? Or maybe someone got a credit card using your identity and credit history, and bought expensive stereo equipment? The crime of identity theft takes many forms. And maybe you found out about it months later, when your loan application was rejected or when you noticed charges on your credit card statement that you didn’t make?
Identity theft is serious. People whose identities have been stolen can spend time and money cleaning up the mess thieves have made of their good name and credit record.
Consumers victimized by identity theft may lose out on job opportunities, or be denied loans for education, housing or cars because of negative information on their credit reports. They may even be arrested for crimes they did not commit. The potential for damage, loss and stress is considerable.
How Do Thieves Steal an Identity?
Identity theft starts with the misuse of your personally identifying information, including your name and Social Security number, credit card numbers or other financial account information. For identity thieves, this information is as good as gold.
Skilled identity thieves may use a variety of methods to get hold of your information:
- They may steal your mail, wallet or purse.
- They may get personal information from you by posing as legitimate companies through email, in a practice known as phishing. Or they might lie to you on the phone, which is known as vishing.
- They may take your information from businesses or other institutions by stealing personnel records, bribing or conning an employee who has access to these records, or breaking into your records electronically.
Some identity theft victims even report that their information has been stolen by someone they know.
What Do Thieves Do with a Stolen Identity?
Once they have your personal information, identity thieves go about their business in a variety of ways.
Credit card fraud:
- They may open new credit card accounts in your name. When they use the cards and don’t pay the bills, the delinquent accounts appear under your name and on your credit report.
- They may change the billing address on your credit card so that you no longer receive bills, then run up charges on your account. Because your bills are now sent to a different address, it may be some time before you realize there’s a problem.
Phone or utilities fraud:
- They may open a phone or wireless account, or run up charges on your existing account.
- They may use your name to get utility services like electricity, heating or cable TV.
- They may open a bank account in your name and write bad checks.
- They may authorize electronic transfers in your name from your accounts, and drain your savings.
- They may take out a loan in your name.
Government documents fraud:
- They may get a driver’s license or official ID card issued in your name, but with their picture.
- They may use your name to get government benefits.
- They may file a fraudulent tax return using your information.
- They may get a job using your Social Security number.
- They may rent a house or get medical services using your name.
- They may give your personal information to police during an arrest, and if they don’t show up for their court date, an arrest warrant will be issued in your name.
How Can You Find Out if Your Identity Was Stolen?
Many consumers learn that their identity has been stolen after some damage has been done.
- You may find out when bill collection agencies contact you for overdue debts you never incurred.
- You may find out when you apply for a mortgage or car loan, and learn that problems with your credit history are holding up the loan.
- You may find out when you get something in the mail about an apartment you never rented, a house you never bought, or a job you never held.
The best way to find out is to monitor your account/bank statements each month, and check your credit report on a regular basis. If you check your credit report regularly, you may be able to limit the damage caused by identity theft. See if you’re eligible to receive a free copy of your credit report this year.
What Should You Do if Your Identity Is Stolen?
Repairing the damage caused by identity thieves may take time and money. Filing a police report, notifying creditors and disputing any unauthorized transactions are steps you must take to restore your good name. More specific information on what to do can be found in the FTC’s guide, Take Charge: Fighting Back Against Identity Theft. Repairing the damage can be a costly, time-consuming and stressful process.
The more time that goes by before you detect the problem, the longer it will take to resolve it. If you discover that your information or identity has been compromised, act quickly to inform the agencies that can be most helpful to you in stopping the illegal use of your good name and credit. Here are the most important groups to contact:
Credit Reporting Agencies
Notify any of the fraud departments of the three major credit-reporting agencies. A single call to just one agency is all you need to have a fraud alert placed on all three of your accounts within 24 hours. You can also get a free copy of your report.
- Equifax Fraud Department: 888-766-0008
- Experian Fraud Department: 888-397-3742
- TransUnion Fraud Department: 800-680-7289
Order additional reports after you’ve resolved the problem to ensure that they reflect the changes. Check again every six months for at least a year.
Financial Institutions & Creditors
- Contact your credit union, other financial institutions, and your creditors to close the affected accounts and open new ones
- Change all personal identification numbers (PINs) and passwords, even on unaffected accounts
- File an identity theft report in the police jurisdiction where you reside
- Contact the Federal Trade Commission to report the crime
- Mail theft is a federal crime, so be sure to notify your local postal inspector if your mail has been stolen
- Notify the Social Security Administration if your Social Security number has been used to gain employment
What Can You Do to Help Fight Identity Theft?
Awareness is the most effective weapon in fighting identity theft. Being aware of how personal information is stolen and how to protect yours is critical. This means monitoring your personal information, uncovering any problems quickly, and knowing what to do if you suspect identity theft.
Armed with the knowledge of how to protect yourself and take action, you can make identity thieves’ jobs much more difficult. The following pages give specific steps you can take to protect your information, as well as ways you can help educate others.
While nothing can guarantee that you won’t become a victim of identity theft, you can take specific steps to minimize your risk, and minimize the damage if a problem develops. These steps make it more difficult for identity thieves to steal your identity.
Deter, Detect, Defend
Following the three “D’s” — Deter, Detect, Defend — will help protect your personal information.
Deter identity thieves by safeguarding your information.
- Shred financial documents and paperwork with personal information before you discard them.
- Protect your Social Security number. Don’t carry your Social Security card in your wallet or write your Social Security number on a check. Give it out only if absolutely necessary or ask to use another identifier.
- Don’t give out personal information on the phone, through the mail or over the internet unless you have initiated the contact and know who you are dealing with.
- Never click on links sent in unsolicited emails. Instead, type in a web address you know.
- Use a firewall, anti-spyware and anti-virus software to protect your computer, and be sure to keep everything up-to-date. Visit OnGuardOnline for more information.
- Don’t use an obvious password like your birth date, your mother’s maiden name or the last four digits of your Social Security number.
- Keep your personal information in a secure place at home, especially if you have roommates, employ outside help or are having work done in your house.
Detect suspicious activity by routinely monitoring your financial accounts and billing statements.
Be alert to signs that require immediate attention:
- Mail or bills that do not arrive as expected
- Unexpected credit cards or account statements
- Denials of credit for no apparent reason
- Calls or letters about purchases you did not make
- Your credit report. Credit reports have information about you, including what accounts you have and your bill paying history.
- The law requires the major nationwide consumer reporting companies (Equifax, Experian and TransUnion) to give you a free copy of your credit report each year if you ask for it.
- Visit AnnualCreditReport.com or call 877-322-8228, a service created by these three companies, to order your free credit reports each year. You also can write: Annual Credit Report Request Service, P.O. Box 105281, Atlanta, GA 30348-5281.
- Your financial statements. Review financial accounts and billing statements regularly, looking for charges you did not make.
Defend against identity theft as soon as you suspect a problem.
Place a fraud alert on your credit reports, and review the reports carefully. The alert tells creditors to follow certain procedures before they open new accounts in your name or make certain changes to your existing accounts. The three nationwide consumer reporting companies have toll-free numbers for placing an initial 90-day fraud alert, but a call to any of the three is sufficient:
Placing a fraud alert entitles you to free copies of your credit reports. Look for inquiries from companies you haven’t contacted, accounts you didn’t open and debts on your accounts that you can’t explain.
- Close accounts. Close any accounts that have been tampered with or established fraudulently.
- Call the security or fraud department of each company where an account was opened/changed without your approval. Follow up in writing, with copies of supporting documents.
- Ask for written verification that the disputed account has been closed and the fraudulent debts discharged.
- Keep copies of documents and records of your conversations about the theft.
- File a police report. File a report with law enforcement officials to help you with creditors who may want proof of the crime.
- Report your complaint to the Federal Trade Commission. Your report helps law enforcement officials across the country in their investigations.
- Online: FTC's Identity Theft Recovery Steps
- By phone: 877-ID-THEFT 877-438-4338 or TTY, 866-653-4261
- By mail: Identity Theft Clearinghouse, Federal Trade Commission, Washington, DC 20580